The start of the year has shown an encouraging rise in the mortgage market. With more money becoming available to lenders, falling interest rates at the higher loan-to-values and the rising feel-good factor of borrowers, maybe we have the recipe for a stronger housing market for the long-term.
To be honest, conditions aren’t all that much better now than they were a year ago, but it’s this ripple effect of confidence that is moving through borrowers that has the greatest effect. The desire to move home is very contagious. Not only could one first time buyer be the start of a chain of ten or twenty next time movers, but each one of them movers will talk to their friends and family and plant a few seeds in heads. It’s a bit like the theory that if one person sets out to make three people happy, then each of those people make another three people happy and so on, eventually one person would have an effect on the entire world.
A sharp rise in mortgage activity isn’t necessarily all good news. It could be a sign of a short bubble which fades away with time. Or it could be happening too fast, which would cause more damage than good. What we are after is a steady, sustainable increase which doesn’t present us with a problem like we met in 2007. The other down side to a sharp rise in mortgage activity, is that some lenders are struggling to cope with the increased demand. We have seen a lot of lenders take on new staff who have had to be thrown in at the deep end to help keep things moving. We have encountered many time delays, errors in administration and problems with lack of knowledge in the last four months. Frustrating as this is, we need to remember they are in a difficult position and are trying their best to cope with the conditions, with some even working into the evening and through the Easter holidays. If you try to imagine your own job and the pressures you would come under if the workload suddenly doubled, and at the same time you took on new staff that needed to be trained.
Having patience is easier said than done though, especially if you are buying a house and the vendors are piling on the pressure on the other side. The best advice for anybody who wants to hurry proceedings is to make sure you get all the documentation you have been asked for in as soon as possible, and as complete as possible. If a lender can slow things down by saying you have missed a page out of a document, or a document isn’t clear or will not suffice, they will do so. You have to remember as well, that although they can sometimes seem to want every last detail from you, some of it not being that relevant, they are still lending you thousands and thousands of pounds, and until everything is complete, the ball is still very much in their court.
Kieron Bassett Financial Services has two Independent Financial Advisers who specialise in mortgages and investment advice. Contact us on (01524) 832057, via e-mail, info@kieronbassett.com, or visit www.kieronbassett.com.
Jason Hinde DipPFS
29th April 2013
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